When trying to understand different types of insurance, it is easy to get confused. One of the most difficult distinctions to make is the difference between critical illness insurance and disability insurance. Critical illness insurance can be purchased through an insurance agent as a private policy or provided as part of a benefits package. It is meant to protect against costs if you are diagnosed with a critical illness. While disability insurance is meant to pay a portion of your income in the event that you cannot work; critical illness insurance generally provides a lump sum payment as specified in the policy if you are diagnosed with an illness, even if you make a full recovery. Disability insurance pays out a monthly benefit instead of a lump sum, usually a percentage of what you earned before becoming disabled. Disability insurance requires an ongoing proof of loss of income, and can stop when you are back to work and earning morney. Critical illness insurance does not require any ongoing proof of loss of income, and is not affected by any other income you make. The fundamental difference between critical illness insurance and disability insurance is that the benefits do not hinge on your inability to work, but rather on the diagnosis of one of the policy-listed illnesses, which include but are not limited to: cancer, heart attack, organ transplant, paralysis, permanent disability, and others. Typically, a critical illness is one that results in a loss of independence. However, the definitions of what constitutes a critical illness are often contested by insurance companies, and can result in a critical illness claim being denied. However, it is important to understand that most critical illness policies have a detailed description of the type of illnesses or conditions that will qualify for the payment. Being disabled from gainful employment may not be relevant to entitlement to a payment under a Critical Illness policy. Each policy has specific terms and conditions, which must be reviewed very carefully. Critical Illness policies also typically have a survival period, or waiting period, that specifies a length of time you must wait after receiving a medical diagnosis to collect a critical illness benefit from the insurance company. This period is typically 30 days, but can vary from one policy to another. If your diagnosed illness is not included on the policy list, your claim may be denied by the insurance company as well. This may give you grounds for a case, and a lawyer should be consulted to determine if you have grounds to proceed with litigation to try and receive the benefits that were denied. Has your critical illness insurance claim been denied? Contact Share Lawyers and put our experience to work for you. We have recently settled cases against The Co-operators, Sun Life, Manulife, Unum Canada and RBC Insurance. Find out if you have a Disability Case.